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- [00:01]
A
This is Madeline Ashley with the Becker CFO and Revenue Cycle podcast. And I'm thrilled to be joined by James Siegel, senior Vice President and CFO of VCU Health. James, thanks for being on with me today.
- [00:12]
B
Happy to be here. I'm glad to be representing VCU Health and as always, love to get into this conversation.
- [00:19]
A
Wonderful. So to kick us off, James, do you mind just sharing a little bit about yourself and your organization with our, with our listeners?
- [00:28]
B
Sure. Again, James Siegel. I've been with VCU Health a little over six years in this role as the Chief Financial officer for about four and a half years. VCU Health is the premier academic medical center, downtown Richmond, Virginia. About 890 beds downtown, including a Children's Hospital of Richmond and then two community hospitals, one out in Tappahannock area of Virginia at 67 beds and a community hospital in South Hill or Mecklenburg area of Virginia, Community Memorial Hospital, about 70 beds. All in were about 4 billion in total operating revenue, about 48,000 discharges, 158,000 ED visits, 1.3 million outpatient visits, over 14,000 team members, over a thousand physicians, and 700 plus advanced practice professionals. So a very comprehensive, integrated academic health system.
- [01:33]
A
Wonderful. Thank you so much for sharing that background there. I kind of want to just dive into the questions here. You know, obviously the healthcare industry is seeing a lot of changes. It's always ebbing and flowing. Right. So I would love to hear maybe two to three trends that you're closely following right now and, and why these trends are so important to you at BCU Health.
- [01:53]
B
Sure. Happy to. I suspect the one big beautiful Bill act is probably front and center for a lot of my colleagues and health care leaders across the nation. Of course, we spent a lot of time scenario planning for the potential impacts of the bill. We know that there are areas of the bill, such as the expiration of the Affordable Care act, tax credits, potential changes as it relates to Medicaid 340B as another example, or site neutrality. We know there will be impact and we are measuring those impacts and they could be material. What I would offer is I think the one area is we still don't fully understand what the impacts will be holistically. And when I say that we can measure what we feel the impacts are going to be, but we don't know as it relates to, say, Medicaid, you know, what the state will do to offset some of the Medicaid funding. We don't know what the timing of some of these changes will be. And there could be significant Changes in payer relationships or other, other strategic changes. So we're doing our best to model. I'll also offer that, you know, these types of impacts to healthcare are not new. If you look back 15 years ago, I suspect we're all talking about the Affordable Care act and changes in value based arena. Whether those were budget neutral related changes, readmission related penalties or hospital acquired infection penalties, all these types of things are somewhat par for the course in healthcare. And even with the most recent challenges of COVID seem to be under a continued performance improvement plan, what can we do to operate more efficiently and grow revenues? And I feel like what we're navigating through right now with the one big beautiful Bill act is no different from what healthcare leaders have been experiencing for decades.
- [03:58]
A
Yeah, you make some good points there. And I'd just also be curious to hear like you mentioned, with the one big beautiful Bill act, there are a lot of unknowns. It's kind of a wait and see and nobody has a crystal ball. But how are you from a financial leadership perspective working with your team? You know, kind of, you know, just, just looking at things from this, this perspective of we're not really sure what's going to happen but here's what we can do. Like do you have any leadership advice there?
- [04:24]
B
Well, we coming out of, of COVID and all the operational improvements that we had to to deploy in 2023, 2022, we built a lot of, you know, muscle memory in terms of performance improvement. What we've done as we ended our fourth quarter of our FY25 which ended on June 30 is we were anticipating significant changes on this front and we stood up. We call Thrive 2026 and that is really a variety of performance improvement whether it's inpatient efficiency and revenue growth, whether it's outpatient access and expansion, labor and non labor related expenses, clinical variation and transformation, a variety of senior leadership led performance improvement teams that are not just creating one time performance improvement, but sustainable performance improvement to navigate the challenges that are on the horizon and really get to a strong operating margin performance and a sustainable operating EBITDA performance. All that allows us to one deliver on the commitments we've made to the commonwealth in terms of delivering that tertiary and quaternary care for the residents of the commonwealth as well as being able to invest in a lot of the future growth opportunities that this health system wants to drive. So sustainability is really the key here in terms of what Thrive 2026 is all about.
- [06:00]
A
Thrive 2026 can you can you dive a little deeper into, into behind that. Just the meaning of that.
- [06:06]
B
Yeah, well, it's. How can we thrive in 2026 and beyond? And the notion of beyond is critical. That's sustainable performance improvement.
- [06:15]
A
Right.
- [06:16]
B
Not the, not the one time that I mentioned, but something that sustains into the future. So all hands on deck again, being led by senior leaders, about nine different performance improvement teams that are very structured under the leadership of the Chief Financial Officer's office and the Chief Operating Officer's office, all under the umbrella of our CEO and the board. They play a critical role in governance over Thrive and holding leaders accountable. We've also invited our chairs, our clinical chairs into operation or into Thrive 2026. And that's critical because they lifeblood of what we do day in and day out, our chairs, our nurses, our clinicians, they are front and center with administrators and operators to drive again that sustainable performance improvement.
- [07:05]
A
Right. So basically an internal program to promote excellence and thrive across the company.
- [07:11]
B
That's exactly right.
- [07:12]
A
That's awesome. And you touched a little bit on just growth and expansion and excitement about the next few years. So could you, could you share with me some things that you're really looking forward to at BCU Health?
- [07:23]
B
Yeah, I feel like I've got to start with the growth that we've experienced in my short tenure in this role because that kind of sets the stage for future growth. Over my short tenure. The health system has made significant investments into both ambulatory assets and inpatient assets. We opened up a 615,000 square foot adult outpatient pavilion downtown to deliver cancer services, medical infusion, radiation, oncology, array of other clinical outpatient related services. And we continue to expand in some of the shelf space in there with the opening of a liver disease and metabolic health clinic. In the fall of this year, we also opened an ambulatory surgery center and medical office building in Henriko area, short pump area of Richmond that has six ORs, OB, GYN, Ortho, Urology, Neurology and imaging services. So continuing to make that critical ambulatory investment, but also expanding and opening a new Children's Hospital of Richmond and that just opened in April of 2023 and late April 2023. And really the, the first two years of that opening, we've seen significant growth as it relates to children's discharges, ED visits, surgeries, outpatient clinic visits, and that's really driving some of our future expansion and growth in terms of longer term. And I'll get into that in just a minute. And then even broader Than that we opened up a, and this is within the main medical center chassis downtown, a comprehensive liver care unit, a dedicated 39 beds to advance pre and post operative care for liver patients. And that's a critical need not only for the Commonwealth. We've seen over an 18% increase in organ transplant over the last two years, but it also is a critical need for patients across the United States as we've performed liver transplants and transplant services, tossing just about every state within the United States. We've also made significant investments in robotics, not only within the medical center, but in our community hospitals, in our children's hospital and in the down the ambulatory surgery center that I mentioned. We actually performed the first robotic living donor liver transplant in the United states earlier in 2025. And then we've also expanded our transplant services into lung lung transplants with the first successful lung transplant last June. So making critical investments in ambulatory and inpatient, children's and inpatient adult and some of the most critical services that VCU Health provides, transplant, orthopedics, cancer, etc. All of these investments have continued to contribute to VCU Health achieving a compound annual growth rate in terms of revenue growth since 2021 of almost 12%. So fantastic growth over the last four plus years.
- [10:40]
A
That is just incredible to hear. It does sound like a very exciting time for VCU Health. And you did mention, I mean, with all of this, this growth and these things going on right now, where do you go from here? What is your goal or plan for the system maybe in the next, even three to five years in terms of growth?
- [10:59]
B
So in terms of continued growth, we just had the groundbreaking of a planned new ambulatory surgery center and medical office building in the Chesterfield area of Virginia that's expected to open in 2027. An additional four operating rooms, two procedure rooms, again offering complex care in the areas of cancer, orthopedics and cardiology. When we opened up the Children's Hospital of Richmond in April 2023, we shelled out certain floors, anticipating future growth. And we've already begun to execute in that shelled space. We are expanding our neonatal intensive care unit by 20 bays. That's expected to open in 2026. And then expanding our inpatient acute beds by another 24 beds. That construction is underway now and expected to go live in 2027. So that'll be bring the full complement of inpatient beds within the Children's Hospital of Richmond to over 116 beds.
- [12:07]
A
This might be an obvious question to you, but I'm just curious that we are seeing a lot of systems investing in ambulatory growth right now. Why focus so much on this area and what does it mean for. For the area that you serve to be in here?
- [12:24]
B
VCU Health is known for the high acute, tertiary and quaternary care that they deliver. When patients come to VCU Health in the downtown medical center, likely they're at a point in their life where they require some of the most critical subspecialty care the Commonwealth has to offer. And we want to bring that level of care out into the community in an ambulatory setting and potentially, potentially an expansion, as I mentioned, in Chesterfield and inpatient beds, specifically in areas that we're known for cancer services, orthopedics, cardiology, et cetera. You know, the community demands that level of care and we want to bring it to where they live, not asking them to always come downtown.
- [13:10]
A
For other systems looking to also, you know, grow in the ambulatory space, what advice would you have for them from a financial perspective?
- [13:18]
B
You have to make care convenient for the patients. Convenience comes in a variety of ways, bricks and mortar in the community. Being able to access the health system, whether that's through my chart, through our EHR, or through any assortment of different avenues, making it easy to access is critical to making that care convenient for the patient. So if you can't make it easy to access and they can't get in your front door. Today's patients are very savvy and they're used to a point and click environment. And you have to deliver care in some ways, even though it's very complicated care delivery, you have to make it easier and easy for the patients to access.
- [14:04]
A
Some great advice there. Well, James, it has truly been a pleasure chatting with you and hearing about all the exciting things that are happening at VCU Health. I thank you so much for coming on the podcast, chatting with me, and I look forward to discussing more great things happening at the system down the line.
- [14:22]
B
I'm happy to do it and always excited to talk about healthcare delivery. So thank you very much.
- [14:27]
A
Well, thank you.